UK House Price Growth Slows Sharply, Survey Shows

U.K. house prices grew at a much slower pace in June compared with May, a survey showed, as political uncertainty linked to last month's inconclusive election result and ongoing exit negotiations with the European Union stifled the property market.

The Royal Institution of Chartered Surveyors said Thursday its monthly house price balance dropped 10 points to plus seven in June, the lowest reading since the immediate aftermath of last year's June Brexit vote.

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"Perhaps not surprisingly in the current environment, the term 'uncertainty' is featuring more heavily in the feedback we are receiving from professionals working in the sector," RICS' chief economist Simon Rubinsohn said.

"This seems to be exerting itself on transaction levels which are flatlining and may continue to do so for a while particularly given ongoing challenge presented by the low level of stock on the market," he said.

Economists are closely watching house prices as an indicator of the overall health of the U.K. economy following last year's Brexit referendum. Over the past three decades, U.K. households have cut spending every time house prices have fallen.

Economic growth had already slowed sharply in the first quarter of the year, as accelerating inflation prompted British shoppers to rein in their spending.